From your first paycheck to your retirement dreams, the Central Provident Fund (CPF) is an ever-present part of life for every working Singaporean. Yet, many find themselves nodding blankly when conversations drift into acronyms like “OA”, “SA”, or “FRS”. Sound familiar? You’re not alone.
The CPF scheme is more than just a savings plan—it’s a pillar of Singapore’s social security system, covering everything from housing and healthcare to retirement. Understanding how it works empowers you to make smarter decisions and stretch every CPF dollar.
This guide breaks down 15 key CPF terms you need to know now. Whether you’re just starting work, buying your first home, or planning your retirement, this is your cheat sheet to becoming CPF-savvy.
The Core Foundations: Your CPF Accounts
1. CPF (Central Provident Fund)
The CPF, or Central Provident Fund, is a compulsory savings scheme for all Singapore Citizens and Permanent Residents (PRs). It’s designed to help you save for three major life needs: retirement, healthcare, and housing.
Every month, a portion of your salary is automatically set aside into your CPF, and your employer chips in too. These contributions are then split into different accounts—each with its own purpose.
It might seem like just another deduction on your payslip, but your CPF plays a big role in securing your financial future—from paying for your first home to covering hospital bills and supporting you in your golden years.
Did you know? The CPF was introduced way back in 1955, and over the years, it’s grown into one of the key pillars of Singapore’s social security system. It’s not just a savings plan—it’s a long-term financial safety net.
2. Ordinary Account (OA)
The OA is the most flexible account and is primarily used for:
- Housing: Down payments and monthly mortgage payments for HDB and approved private properties
- Education: Paying for approved tertiary education courses
- Investments: Under the CPF Investment Scheme (CPFIS)
- CPF insurance schemes
Interest rate: Currently up to 3.5% per annum (inclusive of extra interest for the first $60,000 of combined CPF balances).
3. Special Account (SA)
The Special Account (SA) is your retirement powerhouse within the CPF system. It’s meant specifically for your retirement savings and retirement-related investments, such as certain low-risk financial products.
What makes the SA special? It earns a higher interest rate—up to 5% per annum—compared to your Ordinary Account (OA). That means your money grows faster over time, making it perfect for long-term compounding.
However, because the SA is focused on retirement, the funds are not as easily accessible as those in the OA. You can’t use them for housing or education, for example. But that’s a good thing—it helps keep your retirement savings untouched and growing steadily in the background.
Think of your SA as the slow and steady tortoise in your CPF portfolio—quietly building up your nest egg while you focus on other goals. It’s your future self’s best friend.
4. MediSave Account (MA)
our MediSave Account (MA) is like a personal health savings fund. It helps you cover essential medical costs, such as hospital stays, certain outpatient treatments like dialysis and chemotherapy, and premiums for approved insurance schemes like MediShield Life.
The funds in your MA earn up to 5% interest per year, allowing your savings to grow while supporting your healthcare needs. It’s especially useful during unexpected medical emergencies or when planning for long-term care.
Understanding how your MA works can give you peace of mind and reduce out-of-pocket expenses when medical bills arise.
5. Retirement Account (RA)
When you turn 55, your Ordinary Account (OA) and Special Account (SA) savings are combined to create your Retirement Account (RA). This account is specially set up to support you during your retirement years.
The funds in your RA will be used to join CPF LIFE, Singapore’s national annuity scheme, which provides you with monthly payouts for as long as you live. The amount you receive depends on how much you’ve saved and the CPF LIFE plan you choose.
Your RA is a key milestone in your financial journey—ensuring a steady income throughout your golden years.
Understanding Your Contributions and Withdrawals
6. CPF Contribution Rates
CPF contributions are shared between you and your employer and vary by age. Younger employees contribute more, with rates gradually tapering as you age. For those under 55, the combined contribution is up to 37% of your monthly wage.
Example:
If you earn $4,000 monthly and are under 55:
- Employer: 17% ($680)
- Employee: 20% ($800)
- Total CPF Contribution: $1,480
7. Ordinary Wage (OW) & Additional Wage (AW)
- OW: Your basic monthly salary.
- AW: Bonuses and commissions.
CPF contributions apply to both, but there are contribution ceilings:
- Monthly OW ceiling: $6,800 (as of 2025)
- Annual AW ceiling: $102,000 – OW already contributed
8. Withdrawal Age (55)
At 55, you can withdraw:
- Up to $5,000 unconditionally
- More if you meet the Basic, Full, or Enhanced Retirement Sum
The rest of your savings are transferred into your RA to provide future payouts.
9. Payout Eligibility Age (PEA)
The Payout Eligibility Age (PEA) is the age at which you begin receiving monthly payouts from CPF LIFE. For those born in 1958 or later, this is currently set at 65.
Once you reach this age, your Retirement Account savings—used to join CPF LIFE—will start generating lifelong monthly income to support your retirement needs. The payout amount depends on how much you’ve accumulated in your CPF and the CPF LIFE plan you’ve chosen.
This regular income helps cover your daily expenses in retirement, giving you peace of mind and greater financial independence as you grow older.
10. CPF LIFE (Lifelong Income For the Elderly)
This annuity scheme provides guaranteed monthly payouts for life. At age 65, your RA funds are used to purchase a CPF LIFE plan.
There are 3 CPF LIFE plans:
- Standard Plan: Higher monthly payouts, less inheritance
- Basic Plan: Lower payouts, higher bequest
- Escalating Plan: Payouts increase 2% annually to offset inflation
More details: CPF LIFE Explained
Retirement Sums and Planning for the Future
11. Basic Retirement Sum (BRS)
The BRS provides for basic monthly retirement needs. It’s adjusted annually for inflation. For those turning 55 in 2025, the BRS is $102,900.
This sum ensures modest payouts to cover essentials.
12. Full Retirement Sum (FRS)
The Full Retirement Sum (FRS) is set at double the Basic Retirement Sum (BRS). For those turning 55 in 2025, the FRS is $205,800. Reaching the FRS means you’ll receive higher monthly payouts through CPF LIFE, helping you enjoy a more comfortable and secure retirement. It’s a key target for those who want more financial stability during their golden years, beyond just covering basic living expenses.
13. Enhanced Retirement Sum (ERS)
Triple the BRS—or $308,700 in 2025. This is the maximum you can voluntarily top up to your RA for the highest CPF LIFE payouts.
ERS is suitable for those who want more financial freedom in retirement and can afford to set aside more funds.
14. Retirement Sum Topping-Up Scheme (RSTU)
This scheme allows you to top up your SA (if under 55) or RA (if over 55) with cash or CPF funds. You can also top up your parents’, spouse’s, or siblings’ accounts.
Perks:
- Helps meet retirement sums faster
- Enjoy up to $8,000 in annual tax relief for cash top-ups
15. Matched Retirement Savings Scheme (MRSS)
If you’re a lower-income Singaporean aged 55 to 70, the Matched Retirement Savings Scheme (MRSS) gives you a boost. When you make cash top-ups to your Retirement Account, the government matches it dollar-for-dollar—up to $600 a year.
It’s designed to help seniors with smaller CPF balances build up their retirement savings, so they can enjoy greater financial security in their later years. Every top-up truly goes twice as far.
Conclusion: Your CPF, Your Financial Compass
The CPF system might feel overwhelming at first—full of acronyms, numbers, and rules—but it’s actually a well-structured tool designed to support every Singaporean through life’s key milestones: housing, healthcare, and retirement.
By understanding these 15 essential CPF terms, you’re not just decoding a government scheme—you’re taking control of your financial future. Whether you’re saving for your first flat, preparing for medical needs, or dreaming of early retirement, knowing how your CPF accounts and schemes work gives you the power to make smarter, more confident decisions.
So, what can you do next?
- Check your CPF Statement regularly to track your progress
- Consider voluntary top-ups to boost savings and enjoy tax relief.
- Plan major financial moves—like buying a home—with CPF usage in mind.
Your CPF isn’t just a deduction—it’s your lifelong financial partner. Use it wisely, and it’ll go a long way for you.
